Yahoo, Duet to Team and Offer Online Music

NEW YORK – Internet giant Yahoo! Inc. is teaming up with Duet, an online music distribution company backed by Sony Corp. and French media conglomerate Vivendi Universal, to offer paid music download services.

The alliance makes Yahoo the latest in a string of companies planning to offer such fee-based services as the recording industry attempts to curtail the free music-swapping enabled by such companies as Napster Inc.

Shares of Yahoo surged in early trading on the Nasdaq Stock Market on the news, rising $2.75, or 22 percent, to $15.25. Shares of Sony Corp. rose $4.58, or 7 percent, to $73.09, while U.S. shares of Vivendi rose $1.89, or 3 percent, to $60.220 both on the New York Stock Exchange.

The Duet service will debut this summer with streaming music and plans to add downloads shortly thereafter. The company says it will have thousands of songs on the Internet from Universal Music Group and Sony Music Entertainment available in a fee-based subscription model.

Details about how the service will work and how much it will cost have not been announced. Financial terms of the deal were not revealed.

Universal's artists include Shania Twain and Elton John, while Sony has Aerosmith and Ricky Martin.

Duet will likely face its toughest competition from MusicNet, also scheduled to begin offering subscription-based music streaming and download service this year.

MusicNet's fee-based service, announced Monday, is a venture between Seattle-based RealNetworks and record label owners AOL Time Warner Inc., Bertelsmann AG and EMI Group.

Both Duet and MusicNet have said that they plan to offer songs from music labels' archives on a non-exclusive basis, and that they would like to partner with other record labels.

Analysts have said that such ventures can only succeed if the companies are able to offer a broad enough range of music to entice listeners.

Other music download services, most notably Napster, have come under fire for allowing free downloads of songs for which they don't own the copyrights. After being sued last year by the recording industry, Napster is under a federal injunction limiting what it may offer on its Web site.

Napster, which counts Bertelsmann among its investors, also is expected to move to a subscription-based model, possibly by summer.